RBI introduces new guidelines for inoperative accounts, unclaimed deposits; check details

The Reserve Bank of India (RBI) has introduced new guidelines for banks regarding the classification of unclaimed deposits and inactive accounts. These guidelines are set to come into effect on April 1, 2025.

Inoperative accounts: Under the revised guidelines, accounts will be categorised as 'inoperative' if there have been no customer-initiated transactions within a period of two years. This includes any form of monetary transaction, KYC updates, or non-financial activities such as balance inquiries or requests for cheque books.

Account review: Additionally, banks are required to conduct annual reviews of accounts that have been without customer-initiated transactions for more than a year. Customers will be notified via letters, emails, or SMS if their accounts are at risk of becoming inactive. They will also be given an extended period to reactivate their accounts.

Segregation of accounts: Accounts belonging to government and scholarship funds will be kept separate within the bank's systems to ensure uninterrupted processing of payments from these entities.

Fraud prevention: To combat fraudulent activities, banks will conduct regular audits of accounts that have been dormant. 
Transactions in these accounts once reactivated will be closely monitored for a minimum of six months. Additionally, stringent security measures will be in place to safeguard customer information and prevent unauthorized access.

Account activation process: Clear guidelines for activating dormant accounts or claiming unclaimed deposits will be available on the banks' websites and physical branches. Furthermore, public awareness campaigns will be conducted by banks to educate customers about these procedures.

Penalties and Fees: There will be no penalties for inactive accounts, and banks will not charge any fees for reactivating these accounts. Interest on savings accounts will be deposited regularly, regardless of account activity.

Unclaimed Deposit Information: Banks will provide details of unclaimed deposits, including the account holders' names and addresses (excluding pin codes), on their websites. A search function will be available for the public to easily check for unclaimed deposits, aiding in the retrieval of unclaimed funds.